Lessons From the Real World of RFID
By George Anderson
A report on the InformationWeek Web site says that, even though the application of radio-frequency identification (RFID) technology has been limited in its use, “companies such as Gillette, Levi Strauss, and Wal-Mart are getting data they’ve never had about where goods get stalled on the way to shoppers.”
Simon Langford, manager of global RFID strategy for Wal-Mart, spoke to attendees at the Retail Systems show this week about the retailer’s test of RFID. One vendor, said Mr. Langford, discovered that some shipments were being held up 24 hours longer than they thought at one point in the supply chain. “When they (suppliers) started seeing that data, and getting that visibility, there were some ‘Wows’ in there.”
According to Mr. Langford, RFID doesn’t have to be perfect to improve on the company’s current level of efficiency. Today, the retailer may know what the inventory is in each store but it doesn’t know where the product is in the store. “Today, without RFID, we don’t know what’s in the back room and what’s in the front of [customers’] hands,” he said. “RFID gives us that window.”
For years, manufacturers have questioned retailers’ execution of promotional programs at store-level. Gillette’s director of Auto-ID technology, Jamshed Dubash, said RFID and electronic product code data (EPC) has given the company insights into where opportunities for improvement exist.
In one case, Gillette tracked product and found that it had arrived prior to the start of a scheduled promotion. Stores that moved the promotional product onto store shelves before the event began had 48 percent higher average dollars per point of sale than those that moved product to the shelf after the promotion began. In addition to this finding, Mr. Dubash said Gillette discovered 38 percent of stores involved in the test did not execute properly.
Moderator’s Comment: What is the most important real world lesson being learned from the RFID tests being conducted in the field? How far away are suppliers
and retailers from going beyond testing to a full rollout of RFID technology? –
George Anderson – Moderator